The New Zealand government has banned the sale of existing houses to all foreigners, to curb a sharp rise in housing prices.

The bill, the Overseas Investment Amendment Bill, passed its final reading, and will take place within 2 months.

However, two nationalities were exempt from this ban -- Singaporeans and Australians.

Intervening in the market

Attorney General and Associate Minister of Finance, David Parker had this to say in an interview with the Guardian on Aug. 15:

"We think the market for New Zealand homes and farms should be set by New Zealand buyers, not overseas buyers.

That is to benefit New Zealanders who have their shoulder to the wheel of the New Zealand economy, pay tax here, have families here. We don’t think they should be outbid by wealthier people from overseas."

Parker is confident that the ban will help to make housing more affordable by increasing supply to New Zealanders. In a speech in Parliament, he said:

"We should not be tenants in our own land."

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Why are Singaporeans still allowed to buy though?

Despite the tough talk on foreign home buyers, Singaporeans appear to still be welcomed in the country where they filmed The Lord of the Rings.

A government website, New Zealand Now, has a helpful guide for Singaporeans thinking of moving to New Zealand.

It touts New Zealand's "wide open spaces" as a draw factor:

"With a population 20% less than Singapore’s, spread across a land approximately 1600km long and 350km wide, there’s just not the pressure on space and the environment.

Taking out the small areas where the big cities are leaves vast swatches of country with less than nine people per square kilometre.

There is room to move and lots of natural beauty to enjoy."

Still, this doesn't mean that New Zealand necessarily wants Singaporeans to buy property there.

According to a report from Bloomberg, the ban only exempted Singaporeans and Australians so as to comply with existing trade agreements.

Rising prices

According to the same article by the Guardian, homelessness is on the rise in New Zealand, and only 25 per cent of adult Kiwis own their own home.

House prices in Auckland, one of the largest cities in New Zealand, have risen by 75 per cent over the last four years.

Prime Minister Jacinda Adern, whose campaign promises in 2017 included a ban on foreign ownership, said in Oct. 2017:

"Our goal and commitment is to ban foreign buyers from the existing housing market."

However, foreign investors are still allowed to buy new housing, particularly apartments, rentals and homes available to purchase under rent-to-own or shared-equity arrangements.

Top image from Pixabay.